Collateral free loans for micro enterprises under cgtmse

CitizenInsignificant (Querist) 21 August 2012 This query is : Resolved
The Credit Guarantee Fund Trust for Micro and Small Enterprises promises collateral free loans upto 10lacs for micro and small enterprises.
I want to know what is the minimum financial eligibility criteria for borrowing entrepreneurs and what is the rate of interest charged on such a collateral free loan, if sanctioned at all

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ajay sethi (Expert) 21 August 2012
Fund and non-fund based (Letters of Credit, Bank Guarantee etc.) credit facilities up to Rs.100 lakh per eligible borrower are covered under the guarantee scheme provided they are extended purely on the project viability without collateral security or third party guarantee

The lender has to follow the guidelines issued by RBI regarding charging of interest on the credit. However, the rate of interest shall not exceed 3% over and above Prime Lending Rate (PLR) of the lender. This is exclusive of the fee payable to the Trust.

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